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Via Swamplot -

What are your feelings on this situation regarding stock offerings, prospectuses, Wachovia, and Weingarten?




It's clearly going to be a pain in the ass for Weingarten and Wachovia to deal with regulators, but on the face of it, I don't detect any fishy odors. Corporations modify their capital structure all the time and for all sorts of reasons. If they'd decided on doing that, and they were shopping around banks for underwriting the issuance of new shares with the intent of paying down debt owed to Wachovia, then if Wachovia refused to underwrite, Weingarten would just go and pay another bank to do the same thing. One way or another, the debt owed to Wachovia was going to get paid off, so Wachovia may as well have made a big underwriting fee as part of the deal.

It's true that companies don't typically try to lever down if they have a choice in the matter, so that would be a red flag to analysts looking for hidden messages about Weingarten's own expectations of financial performance. ...however, the fact that Weingarten is de-levering indicates that they're taking a more cautious and hence safer stance. In this market, some analysts might appreciate that. But the fact is that we on HAIF don't have a lot of knowledge about the debt owed to Wachovia. Perhaps this is just Weingarten's most costly capital and the terms happen to allow for relatively few prepayment penalties. We just don't know the specifics.

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  • 11 years later...

Houston-based Weingarten Realty Investors to be acquired by Kimco Realty


Houston-based Weingarten Realty Investors (NYSE: WRI), which owns River Oaks Shopping Center and several other properties locally and across the Sun Belt, will be acquired by Kimco Realty Corp. (NYSE: KIM) for about $3.87 billion in cash and stock.

After the deal closes, Kimco is expected to have a pro forma equity market capitalization of approximately $12 billion and a pro forma total enterprise value of approximately $20.5 billion, according to the companies' April 15 announcement.

Weingarten shareholders will receive 1.408 newly issued shares of Kimco common stock plus $2.89 in cash for each share of WRI. That values Weingarten shares at approximately $30.32 each, based on Kimco's closing stock price on April 14. As of its fourth-quarter 2020 earnings report, Weingarten had 127.61 million shares outstanding.

The deal is expected to close in the second half of 2021, with Kimco and Weingarten shareholders owning 71% and 29% of the combined company, respectively.

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